PIANH Opposes Bill Removing Consumer Protection in Banks

January 27, 2004

In a recent hearing before the House Commerce Committee of the New Hampshire legislature the Professional Insurance Agents of New Hampshire Inc. spoke out against House Bill 1161, which it feels would erode some of the important protections set up by the Legislature to protect the public from coercion.

According to current insurance law, banks and other financial institutions are required to keep the area where they conduct transactions involving insurance or annuity products physically segregated and distinguished from areas where retail deposits routinely are accepted from the general public.

“The purpose of this section (of the law) is to help ensure that people who enter a bank for either banking or insurance activities are not subjected to any coercion, subtle or otherwise, that would lead them to believe they must use that particular bank for one of the activities if they want to use it for the other,” PIANH president Jeffrey Foy stressed. “In other words, it is meant to help prevent banks from ‘tying’ the sale of an insurance product to the concurrent sale of a loan from the same bank, or vice versa.”

The PIANH said it is not aware of any problems the current law-enacted only two years ago-has caused and questions why there is a push to have the bill amended now.

“Clearly, the changes that would be made in HB 1161 add more gray area to a business practice involving two different disciplines that are not black and white to start,” Foy stated.

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